Tesco is introducing an overhaul with plans to slash up to 4,500 staff mainly at its town centre Metros. It wants to speed up restocking and hold less inventory in stockrooms with more going straight onto shelves. It will also make changes to about 134 Express stores with lower footfall, which will see it cut trading hours in some cases (Financial Times £). Some jobs will also go at larger stores (The Daily Mail). The Independentadds that staff members will be asked to work more “flexibly” around stores. The Daily Mailsays the Tesco is battling changes in shopping habits which have benefited online service and discounters.
Usdaw said its Tesco members were ”shocked and dismayed” (The Times £). It urged the government to address the “worries and concerns” of shop workers (BBC). The job cuts are supplementary to the announcement in January that up to 9,000 workers could be axed as part of a plan to simplify the business and cut costs (The Telegraph). The BBCpoints out that Tesco is trying to save £1.5bn as competition in the market intensifies. Tesco shares fell nearly 2% following the announcement (Sky News).
Labour said the Tesco cuts indicated the government was not doing enough to alleviate the burden on traditional shops and prevent the high street being “hollowed out”. Rebecca Long-Bailey, shadow business minister, said Labour would breathe new life into the high street with its own five-point strategy (The Guardian).
Marks & Spencer’s house broker Morgan Stanley is “unconvinced” the retailer should enter the online food delivery market. The broker published its research the same day M&S said it had completed the £750m Ocado deal (The Times £). Melanie Smith, M&S strategy director, has been named chief executive of the new joint venture with Ocado (The Telegraph). Shareholders in Ocado voted the deal through in May. The new venture’s board made up of Ocado’s Tim Steiner and Duncan Tatton-Brown, along with M&S chief Steve Rowe and its food boss Stuart Machin (The Daily Mail).
Takeaway.com and Just Eat announced a deal to merge. The deal values Just Eat’s equity at about £5bn. The combine group will be worth more than €10bn at the two companies’ current market values (Financial Times £). Just Eat shareholders warned the deal could unravel unless Takeaway.com sweetened the offer in which Just Eat investors would take 52% of the enlarged food delivery group (The Times £).
Cadbury’s plans to slash the number of calories in many of is its children’s chocolate products by reducing the size of individual items. Calories in Cadbury Mini Fingers and Mini Animals will be cut to below 100 calories from as early as next month, for example. Curly Wurly will fall from 118 calories to 100 through a reduction in size. The business has yet to decide whether its recommended retail price will fall accordingly. The calorie content of Cadbury Fudge will be cut from 114 to 100. The initiative is a move to bring its confectionery in line with Public Health England advice (The Telegraph).
Retail sales growth last month slowed to the lowest rate on record, accruing to data from the British Retail Consortium and KPMG. Paul Martin, UK head of retail at KPMG, said it was clear most retailers needed more than sunshine to get back on their feet. Nominal retail sales dropped 1.3% in the three months to July compared with the same period last year. Food sales fell 0.3% (Financial Times £). KPMG said grocery had historically benefitted from good weather but sales were even “lacklustre” in food, which was “a cause for concern” (BBC).
Meanwhile, figures form Barclaycard showed consumer spending grew 1.7% in the year to July (The Times £). Overall growth was lower than inflation, which stands at 2%, The Daily Mailpoints out. Barclaycard said underlying uncertainty about the wider economic and political landscape had caused many people to delay buying more expensive items (The Guardian).
McDonald’s new paper straws cannot be recycled (BBC). The fast-food giant has described the straws as “eco-friendly”, yet its plastic straws wererecyclable, according to the report. McDonald’s said the new paper straws were not yet easy to recycle and should be disposed of with general waste.
Amazon chief executive Jeff Bezos sold almost $3bn in Amazon shares in five days last week – more than originally thought. He had previously said he planned to sell about $1bn worth of Amazon shares annually to fund his rocket venture (Financial Times £).
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